Had General Electric's e-filed 2006 income tax return been printed, it would have consumed 24,000 pages of paper, the nation's longest tax return.
No small wonder, then, that the Internal Revenue Service's (IRS) Large and Midsize Business division (LMSB), which examines business taxpayers with $10 million or more in assets, has a daunting mandate. LMSB taxpayers paid $206 billion in taxes in 2006 and filed 175,862 returns with many running to thousands of pages. "It behooves the IRS to do more with less and to be as efficient as possible," says
Don Rocen, a partner at Miller & Chevalier and former IRS deputy chief counsel.
The most frequent criticism of the IIF to date has been that it removes discretion from examination teams. The degree of discretion that remains varies with the tier ranking of the issue in dispute. Examiners will have no choice but to implement centralized guidance in all Tier I cases. Still, some discretion related to the unique circumstances of each case remains in Tier I and Tier II cases.
"There's no question that the flexibility of examiners to resolve these issues has been significantly limited," Goldberg says. The diminution of discretion also means appeals will be harder fought.